Skip to main content
padlock icon - secure page this page is secure

A Negative Effect of Cost‐Reducing Public Investment: The Role of Firms’ Entry

Buy Article:

$52.00 + tax (Refund Policy)

We investigate public infrastructure investment that reduces production costs in oligopoly markets. The government decides on its public investment based on conventional cost–benefit analysis that considers the direct effect (the benefit estimated as a reduction in production costs). If the entry barriers are significant, this estimation is conservative because the positive indirect effect of the subsequent production expansion is ignored. In free‐entry markets, by contrast, the indirect effect can be negative depending on the demand and cost functions. Thus, conventional cost–benefit analysis is conservative in the presence of entry barriers, buy may be too optimistic without entry barriers.
No References
No Citations
No Supplementary Data
No Article Media
No Metrics

Document Type: Research Article

Publication date: March 1, 2019

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more